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PepsiCo has revised its organic revenue forecast for the year, citing cautious U.S. consumers who have reduced their purchases of snacks and drinks. The company also announced a recall of some products.
Based in Purchase, New York, PepsiCo now anticipates that its organic revenue growth will be in the low single-digit range for the year, compared to the previously expected 4% increase.
The company reported a subdued performance in North America, which was impacted by a large recall of Quaker Oats granola bars and cereals, as well as weak demand for Frito-Lay snacks and drinks. Sales volumes for Frito-Lay North America declined by 1.5%, while North American beverage volumes dropped by 3%.
Following consumer resistance to higher prices this summer, PepsiCo has committed to reducing the cost of products like potato chips and tortilla chips.
Although Frito-Lay prices increased marginally by 0.5% in the third quarter, PepsiCo raised prices globally by 3%, leading to a decrease in sales volumes across all markets except Europe.
Third-quarter revenue remained flat at $23.3 billion, falling short of Wall Street’s expectations of $23.8 billion. PepsiCo’s quarterly revenue growth, which had been consistently strong in recent years, has significantly slowed in the past few quarters.
Net income declined by 5% to $2.9 billion, or $2.13 per share. Adjusted for one-time items, PepsiCo’s earnings were higher than analysts’ expectations at $2.31 per share, compared to the predicted $2.29 per share.
Pre-market trading saw a 1% decrease in PepsiCo shares.
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Emil Kovács graduated from the Journalism program at Eötvös Loránd University in Hungary. During his journalism studies, he focused on data journalism, investigative reporting, and multimedia storytelling. He gained experience by writing for the university’s student newspaper, where he gained attention for his articles on social issues. After graduation, Emil began working as a reporter at a European news agency, where he conducts in-depth analyses of international news and current events.
